JUNEAU — Gov. Mike Dunleavy and Alaska state senators said Friday that they support legislation to suspend the state’s tax on motor fuels for one year, an attempt to reduce the impact of rising fuel prices on Alaskans.
No such legislation has yet been introduced, but Dunleavy called for a suspension to be added to a bill advancing toward a vote on the House floor. Rep. Andy Josephson, D-Anchorage, is the author of that bill and said he supports the temporary suspension as long as the underlying bill remains intact.
Alaska’s gas tax is 8 cents per gallon, the lowest in the country. Based on the average number of miles driven per year in the state — 9,111 miles, according to the Federal Highway Administration — and the average fuel economy of an American vehicle, which is 18.1 miles per gallon, suspending the tax would save an Alaska driver around $40.24 per year.
According to a draft copy of the proposal, it would go into effect as soon as passed and would end June 30, 2023. The election-year proposal comes at a time when Alaskans are contending with a spike in prices at the pump amid uncertainty over global oil supply tied to Russia’s invasion of Ukraine.
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The state of Alaska also collects a surcharge of slightly less than 1 cent to pay for spill prevention and response. Josephson’s bill would increase that surcharge slightly.
It isn’t yet clear whether the surcharge would be suspended. In 2008, the Alaska Legislature and then-Gov. Sarah Palin suspended Alaska’s tax amid rising fuel prices but did not touch the surcharge. The tax was re-imposed one year later.
Members of the Alaska Senate cast a non-binding opinion vote in support of a one-year tax holiday on Friday, and Dunleavy issued a statement in support of the proposal the same day.
Other states are considering whether to suspend their taxes, and there have been several proposals to suspend the federal excise tax of 18.4 cents per gallon.
[Editor’s note: This story has been updated to add information from a draft of the proposal and modify a reference to 2022 being an election year.]